Five years from now, the Nomou Initiative aims to collect $50m and spend them in local small- and medium-sized enterprises (SMEs) which translates into financing 125 companies and creating about 3,000 sustainable jobs in Egypt, according to Mohamed Hawary, Regional Investment Director at GroFin MENA.
Nomou, Egypt is promoted by Shell Foundation, an independent charity established by the Shell Group; managed by GroFin, an international development finance organisation; and is co-funded by the UK government, which provided $7.5m to the programme.
Nomou’s work is not limited to funding, but also involves providing technical and business support to entrepreneurs, Hawary told Daily News Egypt.
The cost of providing technical support, be it management or financial advice or otherwise, is funded by the Shell Foundation with one half, while the other half is funded by the UK government, said Carl Aaron, Private Sector Advisor in the MENA Department for International Development.
Nomou also has a presence in the Middle East, where under its umbrella, the Shell Foundation has provided a total of $50m to SMEs in the region, according to Hawary. He did not however specify the amount the foundation is providing to Egyptian entrepreneurs.
Meanwhile, companies that receive Nomou’s financing are obliged to return the money; however the payback period depends on each deal, and can vary from three to seven years, following which the money is injected into other projects, he clarified.
Hawary however did not reveal the interest rate imposed on the provided funds.
Regarding the possibility that a company funded by Nomou might fail, Hawary said that companies are selected carefully; GroFin is responsible for the selection process and with their expertise in this area, the percentage of failure is minimal, equivalent to just 15%, he elaborated.
“If owners are committed to repaying their dues and are still in need of funds, it is possible to refinance them,” Hawary added.
For entrepreneurs to be selected, they must have experience in the field and must participate with at least 30% from the total amount of investment needed, to ensure that they are serious.
As a fund manager, GroFin works with about 24 investors and works on attracting more funds into the Nomou Foundation, according to Yehia Ashour, Senior Investment Manager at GroFin.
GroFin has strong ties with a group of international funds, including the International Finance Corporation (IFC), the World Bank, the European Union, the Shell Foundation, and UK Aid amongst others, Ashour said.
He then highlighted that Nomou is planning to hold talks with the Social Fund for Economic Development (SFD), to see if they could contribute to the fund, given its background in supporting SMEs in the country, Ashour said.
In the same context, Shell Foundation Director Sam Parker said: “In Shell Foundation we are convinced by the power of SMEs to generate economic growth, create jobs and build prosperity.” He added that they are proud of the partnership with GroFin, which has become the largest SME growth fund in the world.
“83% of the population work for this, so they are the dynamic heart of the Egyptian economy. At the moment it’s difficult to get financing, so Nomou is targeting this issue,” British Ambassador John Casson said.
